Yes a internet connection is required, and don't ask me why because I don't know.
as for your setting, this is how I am set up.
open common setting, in the left column,
DVD/Blu-ray ..> read ..> I/O mode ..> auto ..> cache control ..> box is checked.
Write ..> Burn engine ..> ImgBurn ..> Blu-ray ..> write speed ..> recommended ..> writable media (BD 25) size = 23700 ..> writable media (BD 50) =43700, all lower boxes left unchecked.
Protection ..> Blu-ray ..> all boxes should be checked ..> region code if in N.A. or Canada is A.
BD 2 BD default size is at BD 50
well that is how I am set up and no problems so far, but the internet connection is a must.